Housing downturn spells trouble for jobs market this year

By Gerv Tacadena

Economists have warned that weak home prices and the result of the banking royal commission’s probe on lenders would likely affect the employment and career opportunities in several industries and sectors.

Economists have warned that weak home prices and the result of the banking royal commission’s probe on lenders would likely affect the employment and career opportunities in several industries and sectors.

Sunsuper chief economist Brian Parker told ABC News that the results of the investigation of the royal commission would have a significant impact on the creation of jobs in the financial and insurance services sector.

"The only comfort from these results is that demand started to stabilise in the last quarter of 2018, growing 1.6%, suggesting that the worst may be over and some rebuilding may occur in the year ahead," he said.

Also Read: Tougher lending rules dampened home sales in 2018

Callam Pickering, Asia-Pacific economist for Indeed, had the same sentiment, adding that this year is likely to turn out to be lacklustre for finance employment. He said banks and lenders would struggle the most if demand for finance jobs continues to weaken.

"It is mostly from the banking side, given where business is at, and given what's happened with property prices. The banks are likely to do fewer mortgage loans and that will flow through to [lower] demand for new workers," he told ABC News.

Industry watchers forecast further price declines in the Australian housing market this year. In fact, a recent report by Fitch Ratings said that home prices are set to decline by another 5% this year on top of the 6.7% drop from its peak.

Pickering said the housing downturn will also impact the jobs in the construction sector as demand for homes start to decline. Real estate jobs are also expected to decrease given that home sales and commissions are also on the downtrend.

The housing downturn is also anticipated to impact household spending, which will, in turn, influence jobs in the retail sector.

"Soft wage growth for most households isn't doing the sector any favours," he said.

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